Rupert Murdoch flies in to rescue BSkyB takeover
Amid claims of a cover-up at News International, can he save TV deal without sacrificing Rebekah?
For the second time this year, Rupert Murdoch is flying in from New York to take charge of the growing crisis at his London headquarters as it becomes apparent that the dramatic decision to close the News of the World may not be enough to rescue News Corp's takeover bid for BSkyB.
His arrival in London follows yesterday's news, broken by the BBC, that the broadcasting watchdog Ofcom is "extremely concerned" over recent developments in the phone-hacking scandal.
Three men were arrested yesterday on suspicion of phone-hacking and paying police for information – former NotW editor Andy Coulson, former royal correspondent Clive Goodman and a third unnamed 63-year-old.
Possibly more significant is the latest Guardian report that police are investigating whether millions of emails may have been deleted from an internal archive in recent months in a bid to obstruct Scotland Yard's inquiry into phone-hacking at the News of the World.
The Times reports today that police have told staff at the Sunday tabloid that as soon as the final pages are sent to press tonight for the paper's last ever edition, the newsroom with become a "designated crime scene".
Ofcom's warning was seen by politicians and media observers – and clearly by Murdoch too - as a signal that it might block the takeover of BSkyB (News Corp currently owns 39 per cent and wants 100 per cent) on the grounds that the Murdochs are unfit to hold a British broadcasting licence.
Billions are at stake and the question is what Murdoch can do – and what is he prepared to do - to rescue the bid.
What politicians clearly want is the removal of Rebekah Brooks from her post as CEO of News International, the company that runs Murdoch's London newspapers. David Cameron said pointedly yesterday that if he had been offered her resignation he would have taken it. This was despite his close friendship with her.
Brooks was the editor of the News of the World when the voicemail of murder victim Milly Dowler was hacked. She continues to maintain that she knew nothing about her reporters using a private detective to hack into voicemail. Few believe her, because it is now clear the habit was endemic at the NotW.
However, as the Guardian pointed out yesterday, Rebekah Brooks is like a daughter to Murdoch. They go swimming together and he gives her generous birthday presents – including, it is said, a Lowry painting.
As Murdoch left New York, the story had reached the front pages there - even that of his own flagship paper, the Wall Street Journal.
The WSJ reported that shares of BSkyB plunged on Friday "as investors fretted that a scandal that has already spelled the demise of one of News Corp's flagship newspaper titles may claim its attempted takeover of the pay-television company as the next victim".
Murdoch was prepared to close the 168-year-old News of the World and save Rebekah's hide. But is he really prepared to risk the billions of pounds of profit he and his family stand to make if the full takeover of BSkyB is allowed to go ahead?
Rebekah Brooks is in charge of the newspapers and has no role at the parent company News Corp, which is bidding for BSkyB. As such, her removal should not be an issue.
However, it is her close working relationship with Rupert Murdoch's son James, who runs News Corp's European operations, that does make her continued presence at Murdoch's London headquarters relevant.
As the New York Times reports, it's a huge quandary for Murdoch. By holding on to Brooks, he risks Ofcom deciding that his senior executives in London are not fit and proper to run a broadcasting company.
But if he sacrifices her, he will be seen to be acknowledging that, directly or implicitly, she was responsible for the wrongdoing at the News of the World. And because she worked so closely with James, it would be difficult to maintain that he was not involved too.
Former Labour home secretary Alan Johnson has suggested that James Murdoch could be charged under anti-snooping legislation following his admission this week that he had approved out-of-court settlements to hacking victims.
The Daily Telegraph reports Brett Pulley, media correspondent for Bloomberg, as saying: "If the fall-out were to continue, my goodness, if it were to impact James, then we start to talk about it impacting News Corp's succession plan, so that affects the company globally."
If Rupert Murdoch was only a ruthless businessman and not a loving father – or father figure – to James and Rebekah, the right commercial course of action would be clear. Neither would be advised to accept an invitation to go swimming with the old man when he arrives in town, for fear that he might accidently push them under. ·
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